Len­ovo sets up fund for star­tups

China Daily (Canada) - - LIFE - By MASI masi@chi­nadaily.com.cn

Len­ovo Group Ltd an­nounced onWed­nes­day the estab­lish­ment of a $500 mil­lion in­vest­ment fund, seek­ing new growth points as the world’s largest per­sonal com­puter maker is wrestling with a de­clin­ing global de­mand for PCs and a fal­ter­ing smart­phone business.

The fund, solely fi­nanced by Len­ovo, will be used to fi­nance star­tups in cloud com­put­ing, big data, ar­ti­fi­cial in­tel­li­gence, robotics, In­ter­net Plus and other emerg­ing sec­tors.

Yang Yuanqing, chair­man and CEO of Len­ovo, said the new in­vest­ment unit, Len­ovo Cap­i­tal and In­cu­ba­tor Group, will help the com­pany find the big­gest com­mer­cial op­por­tu­ni­ties in the next decade.

“We won’t place a limit on the size of our in­vest­ment in in­no­va­tion as long as star­tups’ prod­ucts fit with Len­ovo’s broad strate­gies and re­ally boast cut­ting-edge techs,” Yang said.

Ac­cord­ing to Yang, Len­ovo is also en­cour­ag­ing its em­ploy­ees to work on in­no­va­tion projects, which can grow into in­de­pen­dent firms, be­come the com­pany’s units and lever­age cap­i­tal from other in­vest­ment firms to scale up.

He Zhiqiang, Len­ovo’s se­nior vice pres­i­dent in charge of the new in­vest­ment unit, said the com­pany will in­vest in 10 to 20 star­tups ev­ery year and help spin off at least 10 com­pa­nies from Len­ovo’s in­ter­nal in­cu­ba­tion projects this year.

“We value qual­ity over quan­tity, with fo­cus on earlystage star­tups,” He said, adding the com­pany is also eye­ing over­seas in­vest­ment op­por­tu­ni­ties.

Len­ovo’s in­ten­si­fied ef­forts to boost in­no­va­tion came as the com­pany is fac­ing mount­ing pres­sure in the PC and smart­phone busi­nesses, two of its ma­jor rev­enue sources.

In the first quar­ter of 2016, Len­ovo failed to make its way into global top five smart­phone ven­dors for the first time, ac­cord­ing to the re­search firm In­ter­na­tional Data Corp.

The com­pany is hav­ing dif­fi­culty in re­viv­ing its ap­peal to con­sumers who are will­ing to buy more ex­pen­sive hand­sets while its Chi­nese peers Oppo Elec­tron­ics Corp and vivo Mo­bile Com­mu­ni­ca­tion Tech­nol­ogy Co Ltd leap for­ward.

Inthe same pe­riod, the global de­mand for PCs hit a nineyear low, de­spite that Len­ovo main­tained its lead­ing po­si­tion in terms of quar­terly ship­ments.

Di Jin, a re­search man­ager at IDC China, said Len­ovo’s prod­ucts are fac­ing fierce com­pe­ti­tion, so it makes sense for the com­pany to look be­yond smart­phones and PCs for newop­por­tu­ni­ties.

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